Mumbai, Aug 21 (IANS) India has the potential to add another 500 MW data centre capacity over next the four years, as demand for artificial intelligence (AI) use cases surge in the country, a report said on Wednesday.
With AI workloads set to surge and eventually outpace traditional cloud computing, the demand for data centres is also expected to rise sharply, according to the report by Avendus Capital, one of the country’s largest investment banks.
The data centre sector doubled from 540 MW in 2019 to 1,011 MW in 2023, making India among the fastest-growing markets globally.
According to Jhawar, the industry is maturing with the entry of long-term investors with commitments of over $250 million per investment, offering de-risked returns.
Expected to grow at a CAGR of 26 per cent over the next three years, the sector is attracting considerable attention from a wide range of investors, from growth stage private equity (PEs) to long-term pension and sovereign wealth funds.
“We believe that India’s data centre market will pave the way for the next wave of investments in real estate and AI, unlocking tremendous stakeholder value,” said Prateek Jhawar, Managing Director and Head, infrastructure and real assets investment banking, Avendus Capital.
Developers can expect to generate more than 25 per cent internal rate of return (IRR) with a build-and-sell model, highlighting the sector’s potential for superior returns compared to other yielding real asset classes.
“This will drive demand for DC capacity in India, which is expected to double to 2GW by 2026,” Jhawar mentioned.
In a major deviation from global trends, hyperscalers in the country are opting to build and own data centres tailored to their specifications — bolstered by long-term growth potential and regulatory guidance for data sovereignty in the country.
According to the report, nearly 94 per cent of the current installed data centre capacity is concentrated in India’s top seven cities.
Over the next five years, around 40 per cent of the total additional capacity is projected to be added in Mumbai, underscoring the city’s significance in the space.
Chennai is expected to contribute about 25 per cent of the new capacity, while Delhi will account for around 15 per cent.
“Edge data centres (smaller facilities located close to the populations they serve) are anticipated to experience substantial demand due to rising data generation and consumption in tier 2 and Tier 3 cities,” the report noted.
–IANS
na/
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
